In case you are new to Singapore, the Certificate of Entitlement (COE) is a quota license which grants the winner of a bid at the uniform open price auction the legal right to own, register and use a vehicle in Singapore for ten years.
The COE price can be high for brand new vehicles, but less so far vehicles looking to renew their COE. So your car is reaching its 10 year mark, should
you renew it or buy a new one?
Let us take a look at the different aspects that can help to determine which option between renewing the COE and buying a new car is the better bet.
The first and foremost thing that one checks while facing this decision is the upfront cost that is needed. Renewing a COE requires a lot less amount than buying a new car, even after you consider forfeiting the PARF (Preferential Additional Registration Fee)rebates. So if the cost is a concern, renewing a COE is the best option.
Condition of the Car
The COE is of ten years, if you have a
good handling of the car and it is in good condition still, renewing COE seems a sane option. Whereas if the car is not going to survive the turmoil for the coming years, you would be better off buying a new car to save yourself of the headache of frequent visits to your mechanic and all the cost that would be involved.
How much would it cost to use the
same car or new car over the years is also important. Road tax rises at the rate of 10% (capped at 150%) while insurance premium 10% - 20% for older cars. Moreover, modern cars are fuel efficient as compared to older models, so if travel distance is huge; a new car would be a more sensible choice.
Duration of Renewal
You don’t have to renew the car for ten years! In fact, there is a five year renewal option so if you think you will be
able to use it well for at least five more years then renewing the COE seems like a good option.
In Singapore, you can get a 100% loan
for renewing a COE. Whereas the loan amount for buying the new car is up to 60% - 70%. It could be a deciding factor if you don’t have cash and plan to do either of them by obtaining a loan. However, car sales loan packages differ from dealer to dealer. Speak to our Sales Executives to find out more about
our specific loan packages for you preferred car today.
With the actual cost of the car
included, the rate at which the respective cars would depreciate is also different. A new car will have a higher depreciation as compared to the old car. So include that as a cost when considering renewing COE v/s buying a car.
While there is a forfeit of PARF
rebates on renewal, you are still eligible for COE rebates. If you choose to give up the car or deregister it, before the term is over, you will get the rebate amount back for the remaining period.
While the decision is completely subjective and will change from person to person, it is always advisable to consider these factors which can help you to decide logically and methodically.
Should you wish to switch to a brand new car, there’s always an option for trade-in for your existing car. Trade-in value will be accessed via selected set of criteria. Speak to our CarTimes Sales Executives for better understanding of the current automobile climate and get the best deal that’s suited to your needs.